By
Godfrey Benjamin
March 26th, 2024
Wells Fargo reported earnings per share of 42 cents on $9.4 billion in interest income, whereas Wall Street was looking for 44 cents in earnings per share from $9.7 billion in net interest income.
Wells Fargo & Co (NYSE: WFC) stock shed approximately 6.02% during Wednesday’s trading session to close the day at $23.25. They had however stabilized during the after-hours trading session as they were up 0.17% in regards to yesterday’s close. The drop was attributed to several fundamental factors that influenced investors to sell off the struggling shares. First, Wells Fargo announced its Q3 report, whereby the results were below Wall Streets’ expectations. In addition, the company announced that it will lay off some salaried advisors as a contingent plan to save on its struggling balance sheet.
Furthermore, the company fired more than 100 of its employees over fraud allegations.
Wells Fargo stocks have been on the receiving end ever since the beginning of the year. According to metrics provided by MarketWatch, Wells Fargo stocks had tanked 56.78%, 8.28%, 9.57%, 6.29% in the past ten months, three months, one month and five days respectively through Wednesday.
Notably, after 28 credible Wall Street experts critically analyzed Wells Fargo stocks, they on average gave them a Hold rating. As of the time of writing, the company had a market capitalization of around $101.93 billion with 4.12 billion outstanding shares. Wells Fargo stocks 2020 dip had eaten away all the gains made after the 2008 market crisis. From the technical standpoint of view, Wells Fargo stocks are retesting decade lows made back in 2010 and 2011.
If the level does not offer enough support for the stocks to rise, Wells Fargo investors should be looking at another sell-off to probably below $10. All eyes remain on the United States presidential elections and the stimulus package expected to cushion the market from the effects of the pandemic.
Wells Fargo Q3 and Other Fundamentals
On Wednesday, the American multinational financial services company, Wells Fargo, reported its Q3 results.
Notably, the results were not what both investors and analysts had anticipated. Wells Fargo reported earnings per share of 42 cents on $9.4 billion in interest income, whereas Wall Street was looking for 44 cents in earnings per share from $9.7 billion in net interest income.
On the other hand, the company reported interest generated from mortgage banking at $1.6 billion, which was up from $1.3 billion in the second quarter and $1.1 billion in the third quarter of 2019. In other news, the company laid off some of its salaried advisors, in a bid to keep up with the alarming revenue decline.
Additionally, the company fired over 100 of its employees in what is said to be fraud charges. A bank internal investigation found that as many as 125 employees made false representations in applying for a type of small-business relief program called an Economic Injury Disaster Loan.